This information was compiled to help consumers answer some of the most
frequently asked questions about homeowners insurance. Please note
these are general responses. Consumers should check with their state
insurance department to verify their positions. Additional questions or
comments should be made to the appropriate state department of Insurance.
Are deductibles required and if so, what are they?
Yes, most homeowners forms contain deductible provisions applicable to
losses occurring under Section I
(a)
dwelling, (b) appurtenant structure, (c) unscheduled personal property,
and (d) additional living expenses. The type and amount of deductible
varies by company. Deductible provisions do not apply to Section II
losses.
Section II losses include personal liability [bodily injury and
property damage] and medical payments to others). Some companies offer
an optional deductible applicable only to wind or hail losses. Most
offer higher deductible options such as $500 or $1,000 at a reduced
premium.
What property and perils are excluded from most homeowner policies?
Most homeowner policies provide that coverage does not apply to
animals, birds, fish, automobiles and business property; for loss or
damage caused by flood, surface water, water which backs up through
sewers or drains, earth movement, nuclear damage, war, etc. Section II
coverage's (personal liability and medical payments) do not apply to
the operation, ownership, use, etc., of any aircraft, automobile,
recreational motor vehicle, water craft powered by more than 50
horsepower motor; bodily injury or physical damage caused by an
intentional act of the insured. It must be noted that these are a mere
sample of property and perils not covered. A complete review of your
policy is the only way to determine what property is covered and what
perils are insured against. Also, there are specific limits of coverage
on property insured under the homeowners policy such as money,
securities, water craft, theft of jewelry, silverware, and or guns.
My house was completely destroyed by fire. I'm trying to collect on my
personal property that I had in the house, but the insurance company is
telling me I need an inventory. Can they do that?
Yes. Whether your policy pays for the replacement or just the actual
cash value, the company is only obligated to pay for personal property
that you can show you owned at the time of loss. It is a very good idea
to keep an up to date inventory in a secure place. Also, to help you
remember what you had, it is helpful to take pictures of each room and
keep them with your inventory.
Our sump pump failed and the insurance company is denying our claim
because the water backed up through our sewers. Can they do this?
Most insurance policies exclude water damage for water, which backs up
through sewers or drains. You may wish to contact your agent and
inquire about putting an endorsement on your policy, which would cover
sewer back up.
All my compact disks and tapes were recently stolen from my vehicle. My
insurance company advised there is no coverage for these items in
either my auto insurance or my homeowners insurance policy. Is this
true?
Almost all auto and homeowners policies exclude coverage for any losses
of tapes, disks and other sound transmitting or receiving equipment
used in an automobile. Some insurance companies however, will provide
coverage for these items for an additional premium. Check with your
agent to determine if coverage can be purchased for the stereo, tapes
and disks used in your auto.
My boat was stolen and now my insurance company will not pay the claim on my homeowners policy. Can they deny my claim?
Theft to watercraft, including furnishings, equipment and outboard
motors, are typically excluded if the theft occurs outside your
residential premises. To adequately cover your boat and its
accessories, you should contact your agent regarding a separate policy
covering the boat.
When can my policy be canceled?
There are two different ways an insurance company can cancel your
policy. Under most state laws, if the insurance company decides to
cancel the policy when your policy renews, the insurance company must
send a nonrenewal notice at least 30 days in advance of the effective
date of nonrenewal. Unless it is an issue of discrimination,
cancellation at the renewal date (also called non-renewal) can be for
any reason. If the cancellation is to occur before the policy is
scheduled to renew, special reasons must exist such as non-payment of
premiums, or discovery of fraud or misrepresentation on the part of the
insured.
I have specifically insured antique
items listed on my homeowners policy. If I have a total loss, would
the insurance company pay me the insured value?
Your insurance company would first confirm the value of the items with
one or more independent antique dealers. You should then be paid a
dollar value based on the dealer(s) estimate of the worth of the
antique items. If you disagree with the settlement offered by your
insurer, then you can follow the dispute resolution process outlined in
your policy. There is a simpler way. Get appraisals and have your agent
establish the stated values in the policy. You should also keep your
appraisals up-to-date.
During a storm, a tree from my
neighbors yard fell and destroyed my fence. Does my homeowners policy
pay for the damage or does my neighbors policy?
Generally, your own policy should cover the loss. Your insurance
company may be able to recover the amount it pays you for the loss and
your deductible from the homeowners insurance that your neighbor may
have if the loss occurred as a result of your neighbors negligence.
Recent rainstorms have flooded and damaged my basement. Is there any coverage under my homeowners policy?
Flood coverage is generally excluded on the basic home owner's policy.
However, some homeowners policies provide coverage for backup of
sewers and drains that cause flooding in your basement. This coverage
can be purchased for a nominal premium. You should check with your
agent to see if this coverage is provided and how much it costs.
If, however, you live in a flood-prone area, you should consider and
may be required by your lending institution, to purchase a flood
insurance policy. Your agent should be able to inform you about the
Federal Flood Insurance Plan and the exclusions and limitations of
coverage in this policy.
When can an insurance company cancel my homeowners coverage during the policy term?
Generally, your policy can be cancelled for these reasons:
Non-payment of premium
Misrepresentation or Fraud
Conviction of a crime arising out of acts increasing the hazard
insured against. (For example, conviction for illegal storage of
fireworks);
Discovery of willful or reckless acts or omissions by the insured
increasing the hazard insured against. (For example, not getting a gas
leak fixed)
Physical changes in the property insured which result in the
property becoming uninsurable. (For example, should the home become
vacant for more that 60 consecutive days, a greater exposure to
vandalism and damage is assumed to exist)
A determination by the Commissioner of Insurance that
continuation of the policy would place the insurance company in
violation of the law.
The food in my freezer went bad because I lost power in my home. Does my homeowners policy provide coverage for this?
The basic homeowner policy usually does not. However, this is a popular
coverage for insurance companies to offer and you may be able to buy
this coverage for a nominal additional premium. There is also the issue
of where the power was lost. Some policies are limited to coverage for
electricity lost in the home or where the electricity enters the home.
Others will limit coverage to within so many yards from the home. Your
agent should be able to tell you about the availability of coverage and
how much it would cost.
